Talking about the latest Beige Book from the Fed and what it could mean for buyers and sellers. Plus much much more…
Federal Reserve Reports Improvement in Real Estate
Last week the Federal reserve released their latest Beige Book, which is their report on the US economy. Wall Street, the banks, and investors all get clues on the general direction of the economy from this report. Even you and I should listen to the Fed’s Beige Book because it can have a dramatic effect on mortgage rates.
For buyers, higher mortgage rates mean less buying power. Higher rates could mean you will need to lower the price range you are looking in.
For sellers, higher rates could mean fewer buyers. Which could mean you will have to lower your price to attract a buyer.
So what did the Fed say?
All 12 Federal Reserve Districts report home sales, home prices or housing construction increased in July and early August 2012. Also they said that economic activity continued to expand in July & August 2012 across most regions. While the overall report was not quite as positive as the last Beige Book, the news for real estate was better.
However the Fed did mention in the most recent FOMC that they might make some changes soon. Maybe another round of Quantative Easing? What the Fed is going to do will depend some on the jobs report later this week and on the never ending problems in Europe. If we see an improvement in the unemployment numbers, it might lead to a dramatic rise in mortgage rates.
Progress Report on the Mortgage Servicer Settlement Released
For a little back ground, 5 big banks agreed to settle with the government for various things related to foreclosures and mortgages. Stuff like NOT following the law. But we have to understand that laws don’t mean much if you are rich, or a bank or a financial firm on Wall Street. If you or I break the law, then we are going to pay for it.
Anyway, these banks agreed to settle and the Office of Mortgage Settlement Oversight has released their initial report on the foreclosure fraud settlement. Despite what the banks and the government would like for you to think, the “progress” is actually not that different from what was happening before the settlement.
If you combine the short sales with the “other program activity,” you find that around 90% of the consumer relief so far granted in the settlement comes from things the banks were doing already. You cannot possibly describe this as a punishment.
Also related is that the Mortgage Settlement Monitor hired a company that worked for Countrywide. Seems like a conflict of interest to me.
More Real Estate News
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